It is the latest episode in what has been the worst week on the high street since the credit crunch hit four years ago.

The total number of jobs in danger stood at around 8,600 yesterday.

Blockbuster’s collapse comes days after entertainment giant HMV – which employs 4,350 people – went into administration.

It means that nearly 16,700 retail jobs have either gone in the past seven weeks or are threatened after electrical chain Comet and photographic business Jessops also went to the wall.

Experts warned Blockbuster would not be the last, as the high street bloodbath of 2013 worsens.

The latest wave of failures could leave a shocking near one-in-five shops empty, up from the already worrying one-in-seven towards the end last year.

Blockbuster, which opened its first UK branch in London in 1989 and has 528 UK stores, has been hammered by the rising popularity in movie downloading and streaming via the internet.

The firm’s parent company in the US went bankrupt in 2010, although it was later rescued in a £200million deal.

Lee Manning, joint administrator at Deloitte, said: “We are working closely with suppliers and employees to ensure the business has the best platform to secure a sale, preserve jobs and generate value for all creditors.

“During this time gift cards and credit acquired through Blockbuster’s trade-in scheme will be honoured towards the purchase of goods.”

Plunging sales stood at £182million last year, compared to £215million in 2011.

The news comes as administrators for HMV said it had been approached by at least 10 potential buyers, raising hopes that jobs could be saved.

However, there were reports HMV’s Irish stores closed yesterday as it went into receivership, threatening 300 jobs.

Professor Joshua Bamfield, director of the Centre for Retail Research, said: “The past week is the worst for threatened job losses since the height of the credit crunch at Christmas 2008, when Woolworths went bust.

“The fact these failures have happened in such quick succession has sent shockwaves through the retail industry – and we expect more high-profile failures in the coming weeks.”

Christine Elliott, chief executive of the Institute for Turnaround said: “It’s a sad fact that over the next five years as much as 30% of the current high street is potentially vulnerable to failure.

“The ‘Comet effect’, which is an example of a botched turnaround, is having a serious knock-on effect. Blockbuster is another example of this.”